Austin College students manage a real fund currently valued over $1.5 million as part of the Student Managed Investment Fund course. The SIF was created in 2007 using a $1 million gift from AC Alumnus Todd Williams. The goal of the fund is to aid students in learning how to manage an investment portfolio of stocks, bonds and exchange-traded funds.
As quoted on the Austin College website, Williams explained his hope for the fund is to promote student learning in the field of investment.
“My hope is that this fund will cause students to learn more about investing as a career while concurrently giving them more confidence to seek opportunities in this field and making them meaningfully more attractive to potential recruiters,” Williams said. “Recruiters want students with practical experience who can hit the ground running.”
Profits from the investment fund are transferred into a scholarship fund that benefits all students in need including majors outside the fields of business and finance. Students apply risk management theories and execute trades under the supervision of faculty advisers and an advisory board comprised of industry professionals.
Austin College senior and business finance major Madison McVay said being part of the SIF class has been an amazing experience.
“Being given the opportunity to handle real money and acting like we are the real managers of the fund has been an incredible opportunity,” McVay said. “It is a very positive experience because it actually gives us hands-on experience about what we will be doing post-graduation.”
During 2008 the original $1 million fell 36 percent dropping the total value to $643,000. The 2008 market at large fell approximately 60 percent that year. Currently, the fund totals around $1.5 million including the $300,000 that has been fed into the scholarship fund.
Senior and business finance major Daniel Crowe explained the research required is immense.
“You can’t mess up because it’s real money,” Crowe said. “We definitely put a lot of time and hours into studying these investments and stocks. We just want the best thing for our school’s portfolio because at the end of the day investing is a long-term activity and it’s something that you can’t expect a huge return on in two weeks. So, we have to do a lot of research before we invest.”
The guidelines established by alumni advisers and the faculty adviser Steve Ramsey include parameters specifying the fund contain 30 percent fixed income items, 20 percent foreign stocks and 50 percent U.S. equities. Students are allowed to choose the U.S. companies to invest in and are charged with monitoring the percentages to assure the portfolio remains balanced. No more than 4 percent can be invested in any one company or 10 percent in any one sector.
The SIF is currently invested in 30 companies including I-Shares. The companies include Berkshire Hathaway, AT&T and Adient among others.
SIF Principle Advisor and Accounting Professor Stephen Ramsey said the program provides students with principles that can be applied to the work world or personal retirement investments.
“Some of our success stories from the past that have been part of this fund have gone on to great things,” Crowe said. “Two that I know of that are vice presidents at Goldman Sachs. We have one former student with the World Bank, and we have students with Accenture and Chase Bank and several others. Students are going on for very rewarding very good paying careers if they participated in this. So, it’s working out.”